A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, what is the weighted contribution of this product?
A) 0.133
B) 0.333
C) 0.40
D) 0.667
E) $1.667

Question

Quizplus · Accepted Answer

Weighted contribution = (Unit contribution / Total sales) * Product sales= ($5 - $3) / $60,000 * $20,000= $2 / $60,000 * $20,000= $2 / $60,000 * $20,000= 0.133

A Product Sells for $5, and Has Unit Variable Costs